Apr 6, 2020 - Technology

Government tech struggles to dole out coronavirus stimulus cash

hand with a tangled mouse cord

Illustration: Eniola Odetunde/Axios

Tech challenges are hampering federal and state government efforts to get funds from the $2 trillion coronavirus relief law into the hands of newly unemployed workers and struggling small businesses who need it.

Why it matters: Many businesses and individuals need the money now for essentials, including meeting payroll and paying rent.

Here are three major issues:

  1. The CARES Act expands unemployment eligibility to gig workers and freelancers but many states’ unemployment programs run on antiquated systems. New Jersey, for example, put out a call for people who have experience with Cobol, a now ancient programming language still used in some states' systems. In Florida, a web-based system went down, forcing some applicants back to pen and paper. Meanwhile, some applicants were told to use a fax machine or outdated browser, such as Netscape or Internet Explorer.
  2. Applications for $350 billion in small business loans launched Friday, but there were a host of problems. Not all banks were ready to accept applications, including Wells Fargo. There were also problems with the back-end system needed to process loan requests at the Small Business Administration, among other issues. Because the system is first-come, first-served, some businesses that badly need the aid could be left high and dry.
  3. Some small business owners say they saw other people's data on the Small Business Administration web site when they went to check on their own applications. The agency confirmed the problem to CyberScoop.

The big picture: While the strain on the health systems is getting the most attention, governments are also being pressured as record numbers of people apply for aid programs.

  • "We hear about those particular things quite a bit," Code for America founder Jen Pahlka told Axios. Many agencies are trying to embrace the challenge and "move at the speed of need," she said.

To help, Pahlka recently launched a volunteer effort called U.S. Digital Response. It's already completed 25 projects for government agencies and has dozens more in the works.

  • For example, USDR volunteers helped create an "emergency assistance eligibility wizard" for the state of New Jersey to help residents see what benefits they might be eligible for.

Yes, but: It's easier to stand up a new informational site than to change the coding in an old unemployment system. Work to modernize such systems has been under way for some time. But, as this map shows, states are in widely different places in their progress.

At the federal level, the U.S. Digital Service, created under the Obama administration and now led by former Googler Matt Cutts, also aims to solve problems like these when (or before) they arise.

  • In an email, Cutts said he couldn't comment on his agency's COVID-19 work.

Our thought bubble: It's not surprising that agencies are struggling to adapt their systems to these sudden new demands.

  • Governments usually have months or years to make system changes, while the details of the CARES Act only emerged shortly before it passed, and the law went into effect almost immediately as the coronavirus crisis accelerated.

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